SJM cuts dividend amid steep slide in Macau casino earnings

SJM Holdings (00880.HK), the flagship firm of Macau casino tycoon Stanley Ho, is cutting its dividend payout following a steep slide in its annual profit.

The gaming company announced Tuesday a final dividend of 15 Hong Kong cents per share for 2015, taking the full-year payout to 25 cents per share.

It marks a 70.2 percent cut compared to the total dividend payout for 2014, the Hong Kong Economic Journal noted.

The casino operator was forced to slash the dividend as its net profit plunged 63.4 percent last year to HK$2.47 billion following a downturn in the industry amid China’s economic slowdown and anti-graft drive.

The full-year dividend figure represents a payout ratio of 57.34 percent, the lowest since 2011.

Chief Executive Ambrose So said SJM intends to conserve cash to counter the poor market conditions.

Macau expects its gaming revenue this year to drop for the third year in a row to 200 billion pataca. The projection for 2016 would mean a decline of 13 percent from the industry revenue last year.

However, there are signs that the worst may be over.

Credit Suisse has forecast a 2 percent slide in the city’s gaming revenue for February, compared to the same month last year, to 19 billion pataca. That would mark the smallest monthly fall since May 2014.

Citigroup, meanwhile, has revised upward its industry revenue estimates for February to 18.5 billion pataca from 18 billion pataca, translating into a decline of 5 percent.

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